Correspondence among

FYI

Importance: High { anologize for the fength of this. but wanted you all to review it before [ship it ta Nancy. Please advise of any sugpastad changes, Flint EM dates for financial emergency declared in December 2011 Mike Brown, apptd 12-1-11 (when fin emer declared under PA 4 of 2011) Ed Kurtz, apptd 8-8-12 (when PA4 was repealed in Aug 2012, Brown couldn’t serve as EM, PA 72 back in effect) Mike Brown, apptd 7-4-13 (Kurtz retired; PA436 in effect) Darnell Earley, apptd 10-8-13 (Brown resigned) Gerald Ambrose, apptd 1-13-15 (Earley appointed DPS EM) Financial Emergency resolved, 4-29-15 (RTAB apptd) Other dates June 26, 2012 — Letter from EM Brown to DWSD seeking permission to blend river water with DWSD water (attached). Sept. 20, 2012 — Letter from EM Kurtz to DWSD requesting written permission to implement blending (attached). March 25, 2013 — The Flint City Council endorses joining KWA (see url below) htto-//blog milve. com/newsnow rink. bimlventry=(20E2/O3/Hint oly council aooroves re him ie /O2 acts April 11, 2013 - Treasurer Dillion sends letter to EM Kurtz (attached) noting conditional approval of move to KWA (pursuant to PA436), pending a review of DWSD’s last, best offer. April 16, 2013 — EM Kurtz informs Treasury that the City will join KWA (attached). April 17, 2013 — DWSD transmits letter to EM Kurtz terminating service to Flint, effective April 17, 2014 (attached). April 17, 2014 — Water service from DWSD officially ends. xxxEND_PAGE:executiveofficeemails20_b0953_2571_2571_1

Importance: High FYI-- Kaffer and the Freep are constructing a “timeline” of the Flint water situation...and she has requested from me: -dates for EM appointments, departures -the date Andy Dillon signed off on KWA | am also going to include a few other items; Flint’s requests to “blend” river water with DWSD water and the DWSD contract cancellation letter. Will ship the info to you shortly for review and input. xxxEND_PAGE:executiveofficeemails20_b0943_2554_2554_1

Importance: High All- Just received this from Dave Eggert... lam going to tell David that Treasury did send a timely response to the Representative. It was due (following a statutory extension) on Tuesday, September 29, 2015. Our response (attachment 1) went in the mail on Tuesday. As you will see, it was a “denial,” as Treasury does not have any records regarding “waivers, permits or applications to use the Flint River...” Apparently, the response has not arrived in his (Flushing, Ml) mailbox...or is arriving today. | have also attached the extension letter (attachment 2), which was timely-mailed as well. Let me know if you have any questions...

| don’t recall either grant being related to “the existence of lead and copper pipes, and the impact...of Flint River water” (Nancy's words) as neither had surfaced as an issue that | am aware of. Brad? The grants...which the City submitted applications for (which | do not have access to tonight)...were to be used for exactly what was described in the Gov’s release: $1.1 million for water system enhancement through improved waste management and $900k for system enhancement through leak detection and pipe assessments. The other $2.24 million you are asking about came from the state-approved (Treasury & DEQ) restructuring of Flint’s Drinking Water Revolving Fund loans. The restructuring saved the city the $2.24m...with $1.5m used to pay for the installation of a Granulated Active Charcoal filter (GAC) at the Water Treatment Plant. Below is a section from the Flint Water TPs distributed in late January-early February 2015. The City has received significant financial assistance through both grant programs and bond restructuring initiatives administered by the MI Department of Treasury. This financial assistance has allowed the City to replace miles of aged pipeline and begin efforts to install a specialized filter at the Water Treatment Plant. In February, Flint was awarded a total of $2 million through two Financially Distressed Cities, Villages, and Townships Grants. $1.1 million was awarded for water system enhancements through improved waste management while $900,000 was awarded for water system enhancements through leak detection and pipe assessments, On April 8", the City announced that it was moving forward with a series of actions to ensure the continued safety of Flint drinking water and address Issues of discoloration and odor. The most significant step will be the installation of a Granulated Active Charcoal filter (GAC) at the Water Treatment Plant. The GAC filter will help block or eliminate the formation of TTHM during the filtration process. A contract for the filter installation was approved by the State Treasurer with the project targeted for completion by mid-July. The $1.5 million project will be funded with proceeds from the state-approved restructuring of Flint’s Drinking Water Revolving Fund loans ($2.24 million). The City is undertaking a number of other improvements to the water system including the acceleration of valve replacements, targeted hydrant flushing, the replacement of two miles of water main in a critical area of the city, and acceleration of the project to automate pliant operations. xxxEND_PAGE:treasury01_b37_6553_6782_206

For Immediate Release City of Flint Announces Action Plan to Maintain Safety and Improve Quality of Flint Water Flint, Michigan — April 8, 2015 — The City of Flint is proceeding with a series of actions to ensure the continued safety of Flint drinking water is maintained and that issues of discoloration and odor continue to be addressed. Most notably, the installation of a Granulated Active Charcoal filter (GAC) at the Water Treatment Plant is expected to be authorized this week by Emergency Manager Jerry Ambrose. The introduction of the GAC to the treatment process at Flint’s plant will absorb or reduce the chemical precursors which will block or eliminate the formation of TTHM during the filtration process. Engineering and design are underway and installation of the GAC is targeted for completion by mid-July. Cost of this improvement is projected at $1.5 million and will be paid for by the proceeds from the state approved restructuring of the City's Drinking Water Revolving Fund loans. In addition to the installation of the GAC, the City of Flint is undertaking a number of other improvements to the water system in the coming months, including a water leak detection monitoring, completion of the hydraulic model and subsequent targeted hydrant flushing program, and the replacement of two miles of water main pipe in a critical area of the city. All of these improvements scheduled to occur within the next six months. “The replacement of this two mile section of pipe along Dupont Street has been identified by a water reliability 1 xxxEND_PAGE:executiveofficeemails21_b0413_0844_0846_1 study as a significant piece of infrastructure and will greatly improve the movement of water in that area of the city,” said Dept. of Public Works Director Howard Croft. Increasing the circulation of the water in the system will immediately result in improvements in water aesthetics, such as discoloration and odor. The MDEQ has given its approval to the project and the process of bidding for construction will begin next week. Construction will take place during the summer of this year. Ongoing repairs and maintenance also continue to improve the health of the system. To date, about 200 water main breaks have been repaired this year. Whenever major work that may disrupt service is scheduled, the City works to notify residents in the affected area with signage and with posts to cityoffiint.com. Updates will include the area of work and the estimated time of completion. Each main break repair stirs sediments in the line. “Residents should know that there is a chance of discoloration or odor any time work is being done on a main in their area,” said Croft. “This is nothing to be alarmed about and it doesn’t mean the water is unsafe.” If discoloration of water or odor occurs due to repairs, residents are reminded that running the water for a few minutes should clear the line. Anyone with water questions should call 810-787-6537. The City of Flint remains committed to addressing water related issues. Along with maintaining the safety of the water, addressing quality and affordability are top priorities. The steps outlined above are indicators of the City’s progress in addressing the most pressing concerns surrounding water. Emergency Manager Ambrose reiterated that development of a contract with DWSD was not going to happen. "Those advocating for a return to DWSD do not want to recognize the financial realities of such a move. Not only would such a move increase the City's costs by more than $1 million per month, but the water from Detroit is no safer than Flint water, as both entities are measured by the same MDEQ standards that have been in place for years. Why anyone would want to send a million dollars a month to DWSD rather than make necessary repairs to the City's own system is beyond me." Further updates on the progress being made to improve Flint’s water system will released in regular updates to the media and in updates to the City’s website, cityofflint.com. Anyone wishing to report an issue can do so under “Online Services”. Anyone with questions about these or any other water issues should call the water treatment plant at 810-787-6537. —END-— -Jason Lorenz Public Information Officer xxxEND_PAGE:executiveofficeemails21_b0413_0844_0846_2 City of Flint (810) 237-2039 jlo xxxEND_PAGE:executiveofficeemails21_b0413_0844_0846_3

Only that Jason indicates things remain stable. itis tine for the city to send out another required notice, which will almost certainty ramp things up. He said he would fwd info as he can.

FOR PLANNING PURPOSES ONLY MEDIA ADVISORY: The City of Flint Department of Public Works will be providing the media with an update on water quality. WHEN: Friday, March 27, 2015 at 2:00pm WHERE: Mayor's Office Conference Room, Flint City Hall -Jason Lorenz Public Information Officer City of Flint (810) 237-2039 xxxEND_PAGE:executiveofficeemails21_b0412_0843_0843_1

FYE

Thanks, Terry. Heads up to all that Flint is required to do its quarterly TTHM sampling again in February. We expect their numbers to be in compliance. But we also expect that they were so far out of compliance in three quarters of 2014 that their annual average will still be out of compliance, which will require them to send another letter to the community in accordance with the safe drinking water act. So the show will, unfortunately, go on.

As I mentioned a couple weeks back, Kelly initially provided some comms assistance/guidance to Darnell Earley. pro bono. At this point, per Jerry Ambrose, she has been retained by Veolia, Flint’s new water consultant, to assist w communications on the project...

Not really — still wondering if TR is working with/through the Emergency Manager OR mayor, or both? Regardless, is a bit fishy.

Answers the question about whether the Mayor is getting counsel from TR ... b

Only problem with that is that the citizens of Flint say they are paying more now than they did when they were connected with DWSD. The city, after all, is not giving the water away free right now, so there is some kind of equalization that comes into play here. Additionally, we just gave them $2M so if we need to use it for a reconnect that’s probably a good use of the money as opposed to people refusing to use city water. Since we’re in charge, we can hardly ignore the people of Flint. After all, If GM refuses to use the water in their plant and our own agencies are warning people not to drink it, another expressing continuing concern over quality, and the differential between what we now collect and what we would pay DWSD is not significant, we look pretty stupid hiding behind some financial statement.

Would add that the city (Earley, Ambrose, etc.) have been unequivocal that doing so would cost at least $1m per month...per the DWSD “offer” ...and the city simply cannot afford that. | have also heard that the city no longer owns a section of pipeline that would have to be used in making any re-connection...making that more difficult and expensive.

In case you guys missed Chastity Pratt’s piece today in Bridge... I've drafted this response. Would like to send it to her yet today. Would like to make sure it doesn’t cause any of us undue heartburn. Please review and call me? Thanks! b Hi, Chastity. Apologies we did not get to connect as you were preparing your story on Flint water. | understand DEQ staff were able to provide some data. Overall, well done from a factual perspective. tf you decide to revisit the issue, keep me in mind. I’d much like to offer some broader DEQ perspective on our drinking water program and this situation in particular. Some key pieces that folks should know include these: 1. The decision to leave Detroit as a water supplier and use the Flint River was developed and pushed by Flint’s local elected officials — over the concerns of state officials. Ultimately, the state signed off on the project (as required because of the EFM) — but consider that Genesee County still gets water from Detroit today, without a contract. This switch wasn’t mandated by Detroit, or the state, or anyone but the leadership in Flint, and was proposed as a money saver until the KWA system comes online. 2. The idea that the state owns Flint’s water woes outright because of the presence of an EFM ignores that much of this problem is the result of decades of the city failing to perform upkeep on their system. Someone might even argue that the absence of a maintenance fund for infrastructure is just one more symptom of a broader problem that resulted in an EFM assigned to keep the city from financial crash. It’s worth noting that the city was approved for a DEQ revolving fund loan in 2009, and DEQ sent a letter congratulating them, only to have the city decline the funding. Seen in that light, the city’s proposed solution of state forgiveness on the $20.7 million it presently owes to the State Revolving Fund and an infusion of new, no-strings money for maintenance and line repairs looks, arguably, different. 3. The heart of the problem isn’t just because Flint’s leaders decided to use the Flint River as a source, It’s true that the river water varies in quality, and requires a flexible 1 xxxEND_PAGE:treasury01_b28_4390_4585_167 treatment strategy to address seasonal fluctuations, but the water aesthetics concerning residents in Flint are compounded by the fact that the system is old and has not been kept up. Flint’s water system consists of more than 500 miles of pipes, and more than half of those pipe miles are more than 75 years old. Much of it is cast iron (hence the color issues}. The hardness of the water from the river certainly appears to be exacerbating the (rusting) discoloration. It’s why GM pulled off Flint’s water. 4. The Safe Drinking Water Act, and Michigan’s drinking water program, regularly and rigorously reviews municipal water supplies for more than 90 different toxins, including microbial ones. The objective is comprehensive screening that keeps water quality up and mandatory reporting to help customers make informed health decisions when there’s an issue, whether that’s an immediate health threat (like e. coli or total coliform) or a long-term potential threat like TTHM. But it is the Safe Drinking Water Act, not the Clear Drinking Water Act. The program does not regulate water for aesthetics like color or smell. 5. We empathize with Flint residents who are unhappy with their water. They pay a lot for it, and in some cases it is not the clear, tasteless product one might anticipate. But our goal at DEQ is to make sure the system operators are testing the water according to state and federal law, and that it meets safety standards. Recent testing indicates that the TTHM levels are dropping rapidly, and we will continue to work with the city to protect water customers in the days, months and years ahead. Thanks, b Brad Wurfel Communications Director Michigan Department of Environmental Quality 517-284-6713 517-230-8006 cell xxxEND_PAGE:treasury01_b28_4390_4585_168 Koryzno, Edward (T. reasury)

Terry, all good and thanks for working these up. Been rebriefed by our staff, so let me throw in some things that are pertinent from that point. Following the formal approval of Flint into the KWA, DWSD sent Flint a letter saying their contract was thereby terminated (early 2013). According to our folks, Genesee County has been using DWSD water without a contract since May 2014. But Flint took the letter to imply a water cutoff, and promptly turned to DEQ with a proposal to use the Flint River (their historic backup system). This proposed shift put the city in the business of water production, where they historically had been in the business of water transmission. DEQ approved the use of the river as a source, based on the treatment plant's past performance as a standby facility and the improvements needed prior to switchover. Several municipalities around the state use surface water supplies (rivers): Blissfield near Monroe, Manistique, and Alma to name a few. The city completed the upgrades at the water plant the facility and DEQ approved it April 2014. There were some initial hiccups. Last summer, there were a couple of ‘boil water’ notices issued. One for a water test that showed e. coli, one for a break in the water main. The challenge to using the Flint River as a source is that the condition of the water is variable and changes with season and weather. It has substantially more organic matter than deep lake sources like Lake Huron. This organic matter is mobilized by xxxEND_PAGE:treasury01_b37_6553_6782_149 high water events, and warm weather also can account for more organic material in the water. The treatment of the organic matter is done with chlorine. One might conclude that the perennial answer is just to use more chlorine to achieve water safety. However, at some point on the continuum, the chlorine and organic matter create TTHM -— total trinalomethanes ~ as a byproduct. When the standard for those is exceeded over several consecutive quarters of testing, the supply is required by law to issue public notice and submit an approved plan for addressing the situation. You'll note that this regulatory approach means TTHM testing is done quarterly. That means people who use the system are exposed to TTHM for several months before the public notice is required. It's because TTHM is a chronic health threat. Over the long term (measured in decades), continued exposure can contribute to some known health problems. Put in context, the EPA (who established the standard and the rule) estimates this rule prevents an estimated 280 bladder cancer cases each year ... out of more than 330 million people who use public water supplies around the country. It's not nothing. State and federal law requires quarterly testing for TTHM and that the public be informed of it when the annual average of four quarters’ worth of consecutive testing shows TTHM levels exceeding 80 parts per billion. Flint’s results managed to exceed the annual average in three quarters, and they must develop a plan to address it. But it's not like an eminent threat to public health. Unlike an e. Coli or even total coliform bacteria maximum contaminant level, which require immediate public notification and response and are part of daily / hourly testing of public water supplies, TTHMs pose a public health concern with chronic, long-term exposure. It's clear the nature of the threat was communicated poorly. It’s also clear that folks in Flint are concerned about other aspects of their water — taste, smell and color being among the top complaints. The Safe Drinking Water Act requires public water supplies be tested for more than 90 regulated contaminants, including microbial contaminants. The act, and the program here in Michigan, work to ensure that water is safe to drink. The act does not regulate aesthetic values of water. Here are some factors affecting the aesthetics of water in Flint. 1. It's the Flint River. The water supplied by DWSD historically came from Lake Huron. it’s softer. With hard water, you get a different flavor and feel. It's why General Motors suspended use of Flint Water — it was rusting their parts. Also, there's the ‘organics’ factor (discussed previously). 2. The system is old. Flint has more than 500 miles of water pipes. More than half of those pipe miles are more than 75 years old. Much of it is cast iron. Hard water 2 xxxEND_PAGE:treasury01_b37_6553_6782_150 can react with cast iron and exacerbates the rusty factor, which creates that brown water that angry residents were holding up in jugs for the media cameras last week. Valve failure has also been a key challenge. The system has an estimated 7,500+ valves. When they stick open or stick shut, it affects the hydraulics of the system and increase areas of stagnation. The city has a backlog of valves that need to be addressed. They’ve done half a dozen or so since November. 3. Flint is old. Many of the homes served by the system are old. Brown water complaints may also be attributable to cast iron pipes in customers’ service connection to the city lines. The DEQ has been encouraging people with water coloration concerns to contact the city and see whether it is the service line or the City’s line causing the issue. Again, discoloration is not an indicator of water quality or water safety, but we recognize that nobody likes it. In summary, the City of Flint has tremendous need to address its water delivery system. We are not aware that they have any Capital Improvement funds for preventative maintenance in place, much less line replacement project monies that will require hundreds of millions. The City was approved for a Revolving Fund loan in 2008 or 2009. As a Distressed Community, they qualified for flexible terms and 2 percent interest rate Revolving Fund Loan. After they were notified they were approved for the loan, they declined it. Previous SRF loans from the state to Flint bear an outstanding balance of $20.7 million today. The DEQ continues working with the city to address the TTHM issue. They can take interim steps — from scrubbing the insides of transmission lines to carefully monitoring the hydraulic challenges in their system — to address customers’ aesthetic concerns. Their TTHM numbers already are showing dramatic improvement; the November testing showed only one of seven sample points exceeding the standard. The key now is that the standard is an average of three quarters’ worth of results. It will be some time before they are officially “not in violation.” However, depending on weather in 2015, it’s not unforeseeable that we will be having this conversation again by next Christmas. The key to the conversation is that TTHM is not a top health concern. That's key because residents need to understand TTHM in context, and it is key because it appears the mayor has seized on the public panic (sparked, frankly, by their poor communication of the violation notice) to ask the state for loan forgiveness and more money for their infrastructure improvement. Another key thing to remember is that once the city connects to the new KWA system in 2016, this issue will fade in the rearview. Until then, our top messages: xxxEND_PAGE:treasury01_b37_6553_6782_151 1. The DEQ Drinking Water program works with communities around the state to ensure that municipalities provide customers with clean, safe drinking water. 2. Municipal water supplies are tested rigorously and regularly for more than 90 regulated contaminants, including microbial contaminants that pose an immediate public health concern. 3. Flint’s exceedance of the TTHM standard should reassure residents that the testing program is effective. 4. TTHM is not an immediate health threat. It is a chronic concern, one that can be problematic over the course of several decades of exposure. The public was notified because the law requires the city to make public notification, so that everyone can make informed decisions. This is particularly true for people with infants or those with compromised immune systems. 5. The DEQ is working with the City to address the situation. Recent tests show the TTHM numbers dropping rapidly. The department will continue working with the city in the months ahead, and residents should feel confident that their water is safe to drink unless the DEQ or City notifies them otherwise. 6. The discoloration and odor issues some Flint residents are experiencing are separate issues from the TTHM issue. TTHM is odorless, colorless and measured in parts per billion. 7. Flint water customers who have questions or concerns about their water should first contact the city to get answers and help. They also can contact the Michigan DEQ at ***teetree (Web or phone address?) Brad Wurfel Communications Director Michigan Department of Environmental Quality §17-284-6713 $17-230-8006 cell xxxEND_PAGE:treasury01_b37_6553_6782_152 Koryzno, Edward (T reasury)

Thank you very much, Terry!

Importance: High All, Please see the attached TPs. | have also attached a couple pdfs noted in the TPs. They include the Treasurer's conditional approval of the eventual move to KWA and the EM’s response to DWSD’s “last, best offer.” Additionally, during my most recent interaction with Jerry Ambrose, he indicated that the water issue is critically important and that he and staff are working on it every day. They have posted a host of information for residents on the City’s website They have extended the deadline for the Water Quality Consultant RFP to this Thursday, to ensure interested and qualified firms can submit comprehensive proposals and assist the city. | have also attached the earlier talking points | had shared with Dave. Let me know if you need anything else in the meantime...or before we speak again... Terry xxxEND_PAGE:treasury01_b28_4390_4585_113 CITY OF FLINT OFFICE OF EMERGENCY MANAGER EDWARD J. KURTZ ELECTRONIC LETTER April 16, 2013 Andy Dillon State Treasurer P. O. Box 30716 Lansing, MI 48909 Dear Treasurer Dillon: Flint, Genesee County and KWA received an eight page letter from Detroit Water and Sewerage Department (DWSD) offering a framework for a long-term agreement with our region. Two scenarios were presented; Scenario 1: Water from the Lake Huron Plant. This offer was dismissed immediately because Flint would still be responsible for their share of the KWA water pipeline delivery system estimated to be $79 million. In addition Flint would not be able to operate the Flint Water Plant in which we have invested over $40 million per MDEQ mandates over the past ten years. Finally, although DWSD shows this as an option and supplied a per month cost projection for the first year, no total costs over the life of the contract were provided. Scenario 2: “Full Service” Water Supply This offer was also rejected. DWSD would supply water to Flint/Genesee the same way they currently are today. They would change the method of calculating our bill. The offer would provide a $1.00 per ccf reduction on our usage for the first year, providing a 30 year contract is signed. After review of the offer, Flint'Genesee has the following concerns: City Hall 1101 S. Saginaw Street - Flint, Michigan 48502 810-766-7346 FAX: 810-766-7218 | www.cityofflintcom xxxEND_PAGE:treasury01_b28_4390_4585_114 Andy Dillon, State Treasurer April 16, 2013 Page 2 1. DWSD’s offer is a framework subject to negotiations and is not a firm offer. 2. DWSD's offer is based on 40.6 mgd, the KWA plan is based on 60 mgd. Flint/Genesee last summer hit the peak of 40.6 mgd and this DWSD offer provides no room for growth. Growth would result in penalties or added cost. 3. DWSD's offer does not include a guaranteed rafe for years two through thirty, nor does it provide a maximum annual increase. 4. DWSD’'s offer does not provide a redundant supply for GCDC. 5. DWSD’s offer does not allow for the use of Flint's existing water plant. 6. The offer indicates that the total cost to Flint over the life of the contract would be $587 ,990,665. No indication of what annual rate of increase was used in this projection. Flint can only assume it is 4.4% based on the Tucker Young report. It is also based on 40.6 mgds. KWA's proposal is for $649,775,166 based on 60mgds (33% more). Based on 60 mgds DWSD's proposal would be $868,950,738. On a final note, Flint‘(Genesee has great concern over the accuracy of the figures provided by DWSD. Attachment 1 indicates that our joint annual cost to DWSD is $50 million; actual cost is less than $25 million. Attachment 2 indicates $800 million in savings over the next 30 years. That is greater than the total cost we would pay DWSD. Therefore, | will sign the resolution to join KWA at the close of business tceday. Edward J. Kurtz Emergency Manager xxxEND_PAGE:treasury01_b28_4390_4585_115 89 (Rev 11-13) STATE OF MICHIGAN RICK SNYDER DEPARTMENT OF TREASURY R_ KEVIN CLINTON GOVERNOR LANSING STATE TREASURER Flint Water/KWA Decision Points and Timeline In November 2012, all major stakeholders (city officials, EM Kurtz, county officials, DWSD, DEQ & Treasury) met to discuss a regional effort to build a new water pipeline from Lake Huron to Genesee County. Flint and Genesee Co. had been getting water from DWSD under a 30-year contract that, at that time had expired. Genesee Co. was planning to build a new pipeline from Lake Huron (Karegnondi Water Authority, KWA) and eventually provide service to the City of Lapeer, Lapeer County, and Sanilac County. County officials believed that continuing to buy water from DWSD would cost the region more than $2.1 billion over the next 25 years but that building a pipeline and developing the KWA would reduce regional cost by approximately $200 million over that time. Genesee County officials said it was cheaper to build their own system than to continue to pay more each year to the DWSD and the proposal was about delivering the best quality water to residents in the least expensive way. EM Ed Kurtz had been exploring options for water since his appointment in August 2012 (to replace Mike Brown). Mayor Walling and City Council were fully supportive of the move to KWA, though under the emergency manager Act, the State Treasurer had to approve deals >$50,000. Prior to the meeting, Treasury suggested a high-level response to media inquiries about the meeting: Treasury officials will be meeting with Genesee County and Detroit officials tomorrow to get the details of the proposed pipeline plan. Until the ultimate costs PO BOX 30716 e LANSING, MICHIGAN 48808 www michigan govitregsury « (517) 373-3200 xxxEND_PAGE:treasury01_b28_4390_4585_116 Page 2 are known and the various studies have been conducted, the benefits to the citizens of Flint and Genesee County cannot be determined. In December of 2012, then State Treasurer Andy Dillon requested an independent review of the KWA proposal. Consulting engineers Tucker, Young, Jackson, and Tull, Inc. conducted a review that supported the County and City preference to join KWA (I’M AWAITING A COPY OF THIS REPORT TO ENSURE ACCURACY ON THIS POINT). In March of 2013, the City was pushing for a decision, given the need to hit tight construction season timelines/deadlines. In late March, Kurtz submitted a resolution to join KWA to the State Treasurer. It was received on March 29, 2013. The Treasurer and DEQ staff thoroughly reviewed the resolution (Under PA 436, the Treasurer must approve contracts >$50K that were not competitively bid). DWSD was allowed an opportunity to make a “last, best offer” to keep Flint with the DWSD. On April 11, 2013, the Treasurer sent his approval to Flint (attached). The effective date for the approval was April 16, 2013 as a condition of the approval was Mr. Kurtz’s consideration of the final DWSD offer. On April 16, 2013, Flint EM Kurtz sent a letter to the State Treasurer, indicating that the DWSD last best offer was not sufficient (attached). Following Mr. Kurtz announcement of the City’s decision to join KWA, Treasury worked from the following talking points. e This is a decision made by the City of Flint and its elected leaders and is a local decision that affects the local water supply. e Flint EM Ed Kurtz kept the city’s elected officials involved throughout the decision-making process and all agree this is best for the citizens and businesses in Flint. e The change is expected to save Flint ~$100m over the next 25 years, and possibly as much as $300m. e The Departments of Treasury and Environmental Quality have approved the financial and environmental soundness of KWA’s plan. e Flint accounts for only 2% of DWSD’s capacity. xxxEND_PAGE:treasury01_b28_4390_4585_117 Talking Points: The City, in conjunction with the Dept. of Environmental Quality, is working diligently...every day...to ensure Flint residents have access to clean, safe water. To that end, the City has issued an RFP soliciting expert assistance to assure the City is doing everything it needs to be doing. The city continues to work closely with staff from the Department of Environmental Quality (DEQ) to ensure water meets safety guidelines, that water operations are managed properly, and all regulations are met. The city is committed to addressing the issue and continues to pursue Its strategy. Background: On December 16, 2014, the City of Flint received a violation notice from the Michigan Department of Environmental Quality (DEQ), stating the City water samples were in violation of Maximum Contaminant Levels (MCL), a violation of the Safe Drinking Water Act (PA 399 of 1976). The DEQ considers the violation period to have begun December 1, 2014. The violation was triggered when water sample reports showed that the City’s water quality, on average, exceed the total allowable level of Disinfection Byproducts during the first three quarters of 2014. Further, four of the City’s eight water sample site locations individually exceeded allowable MCL levels during the same period of 2014. These conditions are considered a Tier 2 violation and, as a result, the City was required to notify the public of these contamination levels by January 10, 2015 (which was done) and continue to notify them every three months until the violation is resolved. The City outlined some potential remedies to the problem in its initial Operational Evaluation Report, dated November 26, 2014. These potential remedies are intended to be implemented in stages. Stage 1 consists of actions that can be implemented without any new construction within the distribution system and are due to be implemented by early March 2015. Troubleshooting of the ozone system. Implementation of different testing methods. Operational changes at the Water Treatment Plant. Increase water main flushing efforts to minimize stagnant water. Identify areas with high water age and implement preemptive measures. xxxEND_PAGE:treasury01_b28_4390_4585_118 The City will be providing additional potential solutions when it updates the Operational Evaluation Report, which must be submitted to the DEQ by March 1, 2015. To date, the City has taken the following actions: As an integral part of the transition to the Flint River on a temporary basis, the MDEQ was consulted about the City’s plans, and ultimately issued necessary permits to proceed. The City also engaged the services of the LAN engineering firm to guide the city in installing the necessary equipment to treat the water on an ongoing basis. This resulted in the development of a comprehensive drinking water plan. The City monitors its water quality on a daily basis to assure that water quality remains within established guidelines. With the variances in water temperature and the leakage and infiltration problems arising as the result of failure of parts of the distribution system, water quality did exceed, for a time, some of the established guidelines. This resulted in the issuance of the recent notices to the public. Efforts taken to address non-compliance included increasing water flow through valve replacements and hydrant flushing and optimizing treatment processes. The City has committed to increasing communication with the public in order to inform water users factually of the issues which have arisen, to alleviate unnecessary concern and to identify steps being taken to address the issues. This is being implemented through detailed educational materials being made available both online and at City Hall, as well as through public informational meetings. Additionally, a full Water System Questions and Answers document is available online. Additional information: State and city officials have said exposure to TTHM is a long-term concern for some if they drink water with elevated TTHM for several decades. Notices indicated that Flint water is safe to drink but warns those with a “severely compromised immune systems or who are elderly” may be at increased risk and should seek advice about drinking water from your health care provider. The city and county are partners in the Karegnondi Water Authority, which is building a pipeline to Lake Huron to bring lake water here for use by the end of 2016. Returning to DWSD would add approximately $1 million (monthly) to the City expenses. xxxEND_PAGE:treasury01_b28_4390_4585_119 Stanton, Terry A. (Ti reasury)

Regarding the Mayor's letter te the Governor, here’s some helpful information regarding loans they'd like forgiven.

Sent from my iPhone Begin forwarded message:

The permits for KWA are already issued. I’ve got our folks working up some talking points on the DEQ-related issues this week, but our role here is not what the news really cares about. b Brad Wurfel Communications Director Michigan Department of Environmental Quality 517-241-7395 - office 517-230-8006 - cell

Here is the start of some topline messages for Flint ... | don’t think that we need to get too deep into the specifics on the deal, we can leave that to Ed and others to discuss. Please let me know of any suggestions and additions that you have. | plan to also put together some background information that we can have on hand when discussing the topic. As | mentioned before, it likely won’t be until the week of Apr 8" that we discuss this publicly. e This is a decision made by the City of Flint and is a local decision that affects their local water supply. e Flint Emergency Manager Ed Kurtz has heavily involved the city’s elected officials throughout the decision-making process and all agree that this is best for the citizens and businesses in Flint. e = This will save Flint at least $100 million over the next 25 years, and possibly as much as $300 million. © The Departments of Treasury and Environmental Quality have approved the financial and environmental soundness of KWA’s plan. e Flint accounts for only 2% of DWSD’s capacity. Thanks, Caleb xxxEND_PAGE:treasury01_b06_0561_0924_363 ha Lamphier, Wendy (Ti reasury)

Per our conversation ... please have set of talking points and whatever comms/media plan that covers all sides of this issue is for this ready to go and share with us before this decision is made. Thanks!